Simply put, liquidity is all about how quickly a trader can buy
or sell something without causing a significant price movement. A liquid market
is one with ready, active buyers and sellers at all times.Here’s another, more mathematically elegant way to think about
it: Liquidity refers to the probability that the next trade will be executed at
a price equal to the last one.Stock markets are generally more liquid than their related
options markets for a simple reason: Stock traders are all trading just one
stock, but the option traders may have dozens of option contracts to choose
from. Stock traders will flock to just one form of DLF stock, for example, but
options traders for DLF have perhaps six different expirations and a plethora
of strike prices to choose from. More choices by definition means the options
market will probably not be as liquid as the stock market.Of course,
Showing posts with label 6 Golden Rules For Option Trading. Show all posts
Showing posts with label 6 Golden Rules For Option Trading. Show all posts
Tuesday 25 February 2014
Tuesday 25 June 2013
OPTION STRATEGY PACKAGE
We have posted a sample strategy Nifty strangle strategy on our blog. If you wish to get more such rocking!!!(5-7) strategies in a month join our option strategies package. The traders having lack of time but interested in trading will love this package which gives LOW RISK HIGH RETURNS.
Price of our OPTION STRATEGY PACKAGE :
Monthly: 5000
Quarterly: 10000
Half yearly: 18000
Yearly : 35000
CONTACT @ 9179333088 FOR DETAILS
Thursday 1 November 2012
BOOK PROFIT IN IDFC STRATEGY
IDFC
strategy given on 25 oct 2012 is giving profit
of 3.1 Hope you have booked profit. IDFC 160 NOV call is trading at 10 and IDFC 170 NOV call is trading at
4.65 now. More about Option Call Put tips on google+
Saturday 27 October 2012
HOW TO HEDGE FUTURE WITH OPTION
I. Buy corresponding number of options as your Future positions.
For example, if you have a position size of five futures contracts, purchase
five corresponding options to completely hedge your position. Also, make sure
the expiration month of the options you purchase matches the expiration date of
the futures contracts you own.
II.
Select
a strike price that fits your accepted level of risk tolerance. When you
purchase an option, you must specify a strike price. The closer the strike
price is to the current futures price, the more expensive the option.
Tuesday 23 October 2012
THINGS TO KEEP IN MIND WHILE TRADING OPTIONS
Below
given are the DO’S while trading in options
1.Always deal with the
market intermediaries registered with Sebi/Exchanges
2.Provide complete and
correct email address and mobile number while opening
trading / demat account.
3.Trade wisely ,create
your own trading strategy depending upon the conclusions drawn from the various
sources.
4.Insist on a Contract
Note for every trade....
Wednesday 13 June 2012
Petronet Strangle Option Strategy
LEG1: BUY PETRONET 140 CALL @ 2.5
LEG2: BUY PETRONET 130 PUT @ 2.5
COST =5
LOT SIZE =2000
RISK PER LOT = 10000
RETURN =
UNLIMITED
Read More For Pay off table.......
Thursday 17 May 2012
NIFTY STRANGLE STRATEGY
OPTION CALL PUT STRATEGY
Volatility is back in market. For coming
sessions we recommend Nifty strangle strategy:
NIFTY STRANGLE STRATEGY
LEG1: BUY NIFTY 4700 PUT @ 32
LEG2: BUY NIFTY 4900 CALL
@ 55
COST =87
RISK PER LOT = 4350
RETURN = UNLIMITED
Tuesday 3 April 2012
DLF SHORT STRANGLE STRATEGY
OPTION CALL PUT
STRATEGY
Option calls
premium have time value in it. Tomorrows trading session is followed by very
Long weekend. To en cash this situation we recommend Short Strangle strategy in
DLF as it is trading around its average Price.
DLF SHORT STRANGLE STRATEGY
LEG1: SELL DLF 200
PUT@5.70
LEG2: SELL DLF 220 CALL@4.70
CREDIT RECD =(5.70+4.70)*1000=10400
OUT LOOK 5-7 Days
Continue to Hold With SL of 3 Rs
Thursday 29 March 2012
OPTION CALL PUT TRADING
KEYS TO SUCCESS IN
OPTION CALL PUT TRADING
1) Don’t Average There is a reason for the expression that ” the trend is your
friend.” Don’t fight it and most of all Don’t assume that it will turn
itself around. Averaging down into a losing trade is a sure way to lose your
money.
2) Trade when the market goes up and when it goes down. Most traders know how to buy calls. They know
how an when to buy when they believe that the market will go up. But
there is an equal amount of money to be made when it goes down. You have to be
comfortable investing in both calls and puts. Again look at the trend and if it
reverses get out of the trade.
3) Trade logically. Fear based trading is a sure way to lose money. Fear creates
paralysis. It keeps you from pulling the trigger and getting out of a trade.
4)Trend:
The objective of successful options strategies is to create profit. It is
opposite of what many believe. You are not there to buy low and to sell high,
but to buy high and to sell higher, or to sell short low and to buy lower. Look
at the trend.
5)
Sell markets that show the greatest weakness; buy markets that show the
greatest strength. Again look at the trend. You are not here just to buy
into strong markets. You are here to make a profit either way.
6)
Trading is not compulsory:You do not have to be in a trade all
the time. There are times when the markets are flat or in a sideways
trend. This is not the time to enter a trade. Stay out of the market!
7)
No one can predict the market. Your options strategies should always
include entry and exit points. Have a stop loss point in mind for each trade
before you enter it. This is where most people get it wrong. You must be
willing to put exit points in and stop losses as well.
You
will win many trades but you will also lose some. No one is infallible. The
main thing to remember is that you must trade long enough and minimize your
losses enough to continue trading for those big winning trades.
Saturday 28 January 2012
6 Golden Rules For Option Trading
6 Golden Rules For Option (call put) Trading
1. Clear Vision Of Target
We must always remember that reward and risk go hand-in-hand in trading and that we cannot expect to achieve high returns without planning for high risk (i.e. draw-downs). Your objectives and goals will be very specific to you, but they must have the following characteristics to be useful:
Be measurable
Be achievable
Be worthwhile
Be positive
Be measurable
Be achievable
Be worthwhile
Be positive
2. Discipline
This is most important part of option trading. In order to realize the full potential of your trading systems it is critical that you take every trading entry, adjust every stop, and close out every trade as and when your system says you should do
3. Never add to a losing trade
Averaging is Options could prove to be very dangerous as there is always time factor.
4. Don’t take too much risk
Risk associated in every Option call should be very low and well calculated before entering any trade.
5. Minimize all trading business costs
You should select your broker carefully and should be aware of all the cost associated with each trade.
6. Be well educated
Keep a track of borad meetings ,any possible major event in market Etc because they create huge effect on Option pricing
Keep a track of borad meetings ,any possible major event in market Etc because they create huge effect on Option pricing
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